Sunday 20 March 2011 20.01 EDT
First published on Sunday 20 March 2011 20.01 EDT

It's the deal of the century: £150 a week to lease more than 2,500 sq km (1,000 sq miles) of virgin, fertile land – an area the size of Dorset – for 50 years. Bangalore-based food company Karuturi Global says it had not even seen the land when it was offered by the Ethiopian government with tax breaks thrown in.

Karuturi snapped it up, and next year the company, one of the world's top 25 agri-businesses, will export palm oil, sugar, rice and other foods from Gambella province – a remote region near the Sudan border – to world markets.

Ethiopia is one of the world's largest recipients of humanitarian food and development assistance, last year receiving more than 700,000 tonnes of food and £1.8bn in aid, but it has offered three million hectares (7.4 million acres) of virgin land to foreign corporations such as Karuturi.

"It's very good land. It's quite cheap. In fact it is very cheap. We have no land like this in India," says Karmjeet Sekhon, project manager for what is expected to be one of Africa's largest farms. "There you are lucky to get 1% of organic matter in the soil. Here it is more than 5%. We don't need fertiliser or herbicides. There is absolutely nothing that will not grow on it.

"To start with there will be 20,000 hectares of oil palm, 15,000 hectares of sugar cane and 40,000 hectares of rice, edible oils and maize and cotton. We are building reservoirs, dykes, roads, towns of 15,000 people. "This is phase one. In three years time we will have 300,000 hectares cultivated and maybe 60,000 workers. We could feed a nation here."

Sparsely-populated Gambella is at the centre of the global rush for cheap land, precipitated by the oil price rise in 2007/2008, when many countries racked by food riots encouraged their farmers to invest abroad to grow food.

The lowest prices are in Africa, where, says the World Bank, at least 35 million hectares of land has been bought or leased. Other groups, including Friends of the Earth International, say the figure is higher. The Ethiopian government says 36 countries including India, China, Pakistan and Saudi Arabia have leased farm land there.

Gambella has offered investors 1.1 million hectares, nearly a quarter of its best farmland, and 896 companies have come to the region in the last three years. They range from Saudi billionaire Al Amoudi, who is constructing a 20-mile canal to irrigate 10,000 hectares to grow rice, to Ethiopian businessmen who have plots of less than 200 hectares.

This month the concessions are being worked at a breakneck pace, with giant tractors and heavy machinery clearing trees, draining swamps and ploughing the land in time to catch the next growing season.

Forests across hundreds of square km are being clear-felled and burned to the dismay of locals and environmentalists concerned about the fate of the region's rich wildlife.

Local government officers have denied claims that people are being forcibly moved to make way for foreign companies.

"This year we will relocate 15,000 people to give them better access to water, schools and transport. [But] it is a coincidence that the investors are coming at the same time as the villages are being relocated," said Kassahun Zerrfu from Gambella's department for investment.

"We are not relocating people to give land to the investors. The problem is there is no infrastructure where they have lived. It's all voluntary."

Under the government's "villagisation" programme, three or four villages at a time are being moved closer to roads and services, but many people say they are not being compensated and are having to wait. "We were promised a school, a health clinic and fresh water eight months ago. We only have one water pump so far," said Udul Ujulu, chief of Karmi village, a new village of 250 people nine miles outside Gambella town.

Others displaced by new farms said they were scared for their lives if they complained. "What power do we have to stop them? We just stay silent," said one farmer told to move off his land.

"There is no movement of population. It's their choice to have these basic services. But they have to abandon their previous way of life," said farm minister Wondirad Mandefro.